PRICES for groceries have stopped rising in major supermarkets following 18 months of dramatic increases, it was revealed yesterday.
Supermarkets are apparently capping food prices to attract shoppers who are tightening their belts in the credit crunch.
However, an industry watchdog yesterday warned it will take more to increase confidence amongst the public, who are conc
erned about their mortgages, fuel bills and unemployment.
A shopping-basket survey of the average price of 100 staple grocery products including bread, milk and butter showed food prices have stalled for the first time since November 2007.
"In the UK at least, consumers are finally seeing prices hold and even fall in some cases," said the report in trade magazine The Grocer.
"From December to February, the trolley price leapt 2.8 per cent to a record high of £185.27 but rather than continue the upward inflationary trend, March's trolley price remained virtually level at £185.26."
Morrisons and Asda made the biggest price cuts this month, with both reducing their month-on-month trolley totals by 1 per cent.
Somerfield's total dipped by 0.3 per cent but the price of Tesco's trolley rose by 1.6 per cent. Waitrose's was up by 0.6 per cent and Sainsbury's was 1.3 per cent more expensive.
Experts credited Morrisons' focus on low prices and a reaction by its rivals to its strong recent sales growth with halting the upward trend.
Darren Shirley, an analyst with Shore Capital, said: "Retailers have recognised shoppers are having to tighten their belts because of the credit crunch.
"Promotional activity has increased and Asda, Tesco and Sainsbury's certainly took note of Morrisons' successful Christmas by increasing their own promotional activity." However, Martyn Evans, director of the Scottish Consumer Council, said it was difficult to be optimistic about the findings.
"The current fall in consumer confidence is being driven by people's worries about their mortgages, about paying their fuel bills and whether they're going to be able to keep their jobs," he said.
"Food bills may make up a relatively small proportion of household spending, but recent increases have contributed to this feeling that families have to be careful how they spend.
"If retailers are absorbing price rises then good for them. Unfortunately, most of the things that need to change to make people feel confident enough to spend aren't things retailers can do much about."
'Lives at risk' warning over soaring food costs RISING food prices are putting millions of people's lives at stake and could have a knock-on effect on global inflation, the International Monetary Fund and World Bank leaders have warned.
The issue of how to deal with the global financial crisis and dramatic rises in food and energy prices dominated the two-day spring meeting of the IMF's international monetary and financial committee and joint World Bank-IMF development committee.
The final session yesterday focused on how the crisis was affecting developing countries where the World Bank is trying to help reduce poverty.
"We must respond to the immediate emergency situation," said Robert Zoellick, the bank's president, before the meeting.
"In the US and Europe over the past year we've been focused on the price of gasoline at the pump," he added. "While many worry about filling their tanks, many others around the world are struggling to fill their stomachs. And it's getting more and more difficult every day."
In many developing countries, the poor spend up to 75 per cent of their income on food, said Mr Zoellick, so when basic food prices rise, "it hits hard".
He said that to deal with the immediate crisis, the international community must close a food gap of at least £316 million identified by the UN World Food Programme.
Dominique Strauss-Kahn, the head of the IMF, said that if the price spike continued, "children will be suffering from malnutrition, with consequences for all their lives".
The UN Food and Agricultural Organisation forecast a 56 per cent rise in the cereal import bill of the world's poorest countries in 2007-8.
The full article contains 686 words and appears in The Scotsman newspaper.
